[Quote No.26531] Need Area: Money > Invest "All shortage situations [for materials and resource and energy stocks] go through the same four basic stages. Knowing them will help you figure out when to get in and out of your investments.
Stage One: Dropping demand accompanied by low prices. There's little capital investment in the sector.
Stage Two: Rising demand accompanied by increasing prices. Companies grow profits from rising prices.
Stage Three: More production comes online. Everything comes together during this phase. Greater volume and higher prices jack profits WAY up. It's the high-point of the cycle.
Stage Four: Supply and demand rebalance. As production catches up to supply, prices stabilize and eventually fall. Production contracts as prices become less and less attractive.
The best time to invest? It's not in Stage Three, when profits are at their highest. That's too late. The company has already become a magnet for investors, driving its shares up. Plus, since investors are forward-looking, they're already anticipating the excitement-dousing Stage Four and will soon begin selling their shares.
The latest stage to invest in would be Stage Two. But even better would be to invest toward the end of Stage One. This is when the company should be a screaming bargain, and good things usually begin to happen shortly thereafter.
As the cycle winds down, you'll have plenty of time to get out of these companies before they're in the 'bust' part of the 'boom-and-bust' cycle. But you need to know your stages. The end of Stage Three or the beginning of Stage Four is when you get out. It makes sense, yes? After all, by Stage Four we no longer have a shortage situation to play." - Andrew GordonEditor of INCOME, a monthly financial advisory service that uncovers income-generating stocksAuthor's Info on Wikipedia - Author on ebay - Author on Amazon - More Quotes by this AuthorStart Searching Amazon for GiftsSend as Free eCard with optional Google Image

[Quote No.29106] Need Area: Money > Invest "There's something that worries Australian bankers more than investment losses on CDOs or rotten subprime assets. The big worry is funding costs.
Investments aren't the main business of banks. Banking is. So how doth one bank? Step one: borrow (fund). Step two: lend (fleece).
There's a big issue with step one at the moment. Funding is expensive.
Here's a way you can keep track of it. The best indicator of the ease with which banks can fund is the difference between the 90-day bank bill rate and the RBA's cash rate. The 90-day bill is pretty much a short term loan. The further the 90-day rate is above the base interest rate, the more expensive funding is. And the more trouble banks are having.
In short, it's The Bank Pain Index. As the spread rises, the splitting headache located in the craniums of bank CEOs splits that little bit harder...
The spread has gone from 0.10 to 0.53 since this time last year. It's been as high as 1.00... it won't be coming down for a while yet. Until it does, banks will scramble to find ways to keep their margins up." - Dan Denningeditor of the financial newsletter, 'Money Morning'. Quoted from 'Money Morning', 31st July 2008.Author's Info on Wikipedia - Author on ebay - Author on Amazon - More Quotes by this AuthorStart Searching Amazon for GiftsSend as Free eCard with optional Google Image

[Quote No.6360] Need Area: Money > Invest "When considering our future, preparing for retirement is often helped by share investing. One of the most successful investors ever is Warren Buffett, becoming the richest man in the world, through his share investing skill. We all can be helped by following his simple but not necessarily easy methods.
Buffett's philosophy on share investing is a modification of the value investing approach of Benjamin Graham.
Buffett buys quality companies, with solid customer support and good economics, especially those possessing sustainable competitive advantages which he calls their 'economic moat' that protects them from competition, over the long term.
Buffett buys them when they are cheap compared to their intrinsic value; reasoning that as long as the market undervalued them relative to their intrinsic value he is making a wise investment, as the market would eventually realize this and pay more.
To achieve this Buffett is very careful what and when he buys. He does not hurry to invest in a business, meeting his criteria, if the value is not discernible. [ie its price doesn’t provides a higher rate of compounded return compared to other available investment opportunities.] Therefore he patiently waits for a market correction or downturn to buy these solid businesses at reasonable prices. He views downturns in the stock market as buying opportunities: being conservative when greed and speculation is rampant in the market and aggressive when others are fearing for their capital. This strategy conserves capital foremost and helped him avoid the internet boom and bust without significant damage, although critics noted that it may have led him to miss out on potential opportunities during the same period.
" - Seymour@imagi-natives.comAuthor's Info on Wikipedia - Author on ebay - Author on Amazon - More Quotes by this AuthorStart Searching Amazon for GiftsSend as Free eCard with optional Google Image